[First Reprint]

SENATE, No. 1348

STATE OF NEW JERSEY

INTRODUCED JUNE 20, 1996

By Senators PALAIA and CODEY

An Act concerning the New Jersey Racing Commission and amending ¹[P.L.1992, c.19] P.L.1940, c.17, P.L.1984, c.236, and P.L.1971, c.137 and supplementing Title 5 of the Revised Statutes¹.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    ¹[1. Section 15 of P.L.1992, c.19 (C.5:12-205) is amended to read as follows:

    15. The New Jersey Racing Commission shall establish and administer a separate fund to be known as the "Casino Simulcasting Special Fund," into which shall be deposited the sums dedicated to the fund by section 13 of this act.

    Moneys deposited in the special fund shall be annually disbursed in their entirety by the New Jersey Racing Commission and used for the following purposes in the following order of priority:

    a. Moneys in the special fund shall first be used to pay the difference between the amount paid to the Atlantic City Racetrack pursuant to subsection c. of section 13 of this act and $2,000,000 in each calendar year during calendar years 1993, 1994, and 1995, except that if casino simulcasting in Atlantic City begins after January 1, 1993 and before January 1, 1994, the amount to be paid for calendar year 1993 shall be the difference between the amount paid pursuant to subsection c. of that section 13 and that portion of $2,000,000 determined by the following formula:

A = C

.....................

B D

here: A = 365 minus (a) the number of racing days in 1993, other than live racing days, prior to the commencement of casino simulcasting in Atlantic City that the Atlantic City Racetrack conducts simulcasting under the provisions of the "Simulcasting Racing Act," P.L.1985, c.269 (C.5:5-110 et seq.) or the provisions of section 37 of P.L.1992, c.19 (C.5:5-125), and (b) the number of live racing days conducted by the Atlantic City Racetrack in 1993;

            B = 365 (the number of calendar days in 1993);

            C = the total amount to be paid to the Atlantic City Racetrack;

            D = $2,000,000.

    b. From any amounts remaining after the payments required by subsection a. of this section are made, the New Jersey Racing Commission shall pay to each casino which began to conduct casino simulcasting within six months after the effective date of this act an amount equal to the breakage moneys and outstanding parimutuel ticket moneys resulting from wagering at the casino on simulcast horse races from out-of-State sending tracks during the first five years that the casino conducts casino simulcasting and 50% of these amounts thereafter.

    c. From any amounts remaining after the payments required by subsections a. and b. of this section are made, the New Jersey Racing Commission shall pay to each casino which begins to conduct casino simulcasting later than six months after this act's effective date, including casinos established after that date, an amount equal to the breakage moneys and outstanding parimutuel tickets moneys resulting from wagering at the casino on simulcast horse races from out-of-State sending tracks during the first two years that the casino conducts casino simulcasting and 40% of these amounts thereafter.

    d. From any amounts remaining after the payments required by subsections a., b. and c. of this section are made, the New Jersey Racing Commission shall compensate, in such amounts as that commission deems appropriate, the following entities in the following order of priority:

    (1) the New Jersey Racing Commission to offset its costs associated with the regulation of horse racing and parimutuel wagering, as approved by the Director of the Division of Budget and Accounting;

    (2) any racetrack in this State which can demonstrate to the satisfaction of that commission that its financial well-being has been negatively affected by casino simulcasting;

    [(2)] (3) any racetrack in this State which that commission finds to be financially distressed;

    [(3)] (4) any horsemen's organization which will use the money to fund a project which that commission determines will be beneficial to the racing industry; and

    [(4)] (5) all racetracks located in this State on an equal basis.

(cf: P.L.1992, c.199, s.2)]¹

    ¹l. Section 44 of P.L.1940, c.17 (C.5:5-64) is amended to read as follows:

    44. Each holder of a permit shall distribute all sums deposited in any pool where the patron is required to select one horse to the winners thereof, less an amount which in harness races shall not exceed 17% of the total deposits plus the breaks and which in other races shall not exceed 17% of the total deposits plus the breaks. In every pool where the patron is required to select two horses, the holder of each permit for either harness or running track shall distribute all sums deposited in each pool to the winners thereof, less an amount which shall not exceed 19% of the total deposits plus the breaks. In every pool where the patron is required to select three or more horses, every holder of a permit shall distribute all sums deposited in each pool to the winners thereof, less an amount which shall not exceed 25% of the total deposits plus the breaks. Every permitholder shall distribute to the persons holding winning tickets in any of the aforementioned pools, as a minimum, a sum not exceeding $0.10, calculated on the basis of each dollar deposited in any pool after the deduction of the said 17%, 19% or 25%, as the case may be. Should the amount remaining in the pool be insufficient to pay the winners the minimum, the breakage accruing in that race, or any necessary portion thereof, shall be applied toward making up any such deficiency. The breaks are hereby defined as the odd cents over any multiple of $0.10, calculated on the basis of $1.00 otherwise payable to a patron. Every permitholder engaged in the business of conducting running race meetings under this act, except the New Jersey Sports and Exposition Authority established pursuant to P.L.1971, c.137 (C. 5:10-1 et seq.) and the Garden State Racetrack as provided in section 5 of P.L.1982, c.201 (C.5:5-98), shall distribute as purse money the breaks as herein defined, except as the same shall have been applied toward making up a deficiency in a pool as herein provided. Every permitholder engaged in the business of conducting harness race meetings under this act, except the New Jersey Sports and Exposition Authority and the Garden State Racetrack as provided in section 5 of P.L.1982, c.201 (C.5:5-98), shall retain for his own uses and purposes 50% of the breaks as herein defined, except as the same shall have been applied toward making up a deficiency in the pool as herein provided, and shall distribute as purse money the remaining 50%. The New Jersey Sports and Exposition Authority shall retain all breaks commencing on May 10, 1971 as revenue to the authority, except as the same shall have been applied toward making up a deficiency in a pool as herein provided.

    Every permitholder shall submit to the commission every seventh day of any and every race meeting a report under oath showing the daily and total amount of such breaks, together with such other information as the commission may require. All sums held by any permitholder for payment of outstanding parimutuel tickets not claimed by the person or persons entitled thereto within six months from the time such tickets are issued shall be paid upon the expiration of such six-month holding period as follows:

    a. In the case of running and harness races, beginning July 1, 1997 50% of those sums shall be paid to the racing commission for deposit in the general fund of the State and disposition in accordance with section 4 of P.L. , c. (C. ) (now pending before the Legislature as this bill);

    b. In the case of running races, 50% of those sums shall be paid to the commission and set aside in the special trust account established pursuant to section 46 b.(1)(e) and section 46 b.(2)(e) of P.L.1940, c.17 (C.5:5-66); and

    c. In the case of harness races, 25% of those sums shall be retained by the permitholder to supplement purses for sire stakes races on which there is parimutuel wagering, and 25% shall be retained by the permitholder to supplement overnight purses.

    Where it is shown to the satisfaction of the commission that the reason for the parimutuel tickets being outstanding and unclaimed is the loss, misplacement or theft of said tickets within the confines and control of the parimutuel department of any permitholder, and it is further shown to the satisfaction of the commission that said parimutuel tickets have been cashed by such parimutuel department, the commission may adjust and credit the permitholder's account accordingly and the permitholder shall reimburse any employee who has been held personally accountable and paid for such lost, stolen or misplaced tickets.

    All outstanding parimutuel ticket money shall be deposited in an account separate and apart from the track's mutuel or general treasury account. The outstanding parimutuel ticket account shall be subject to the rules and regulations prescribed by the Division of New Jersey Racing Commission.¹

(cf: P.L.1986, c.19, s.1)

    ¹2. Section 1 of P.L.l984, c.236 (C.5:5-64.1) is amended to read as follows:

    1. Notwithstanding the provisions of section 44 of P.L.1940, c.17 (C.5:5-64) or any other law to the contrary, a holder of a permit to conduct harness race meetings, who operates a racetrack at which harness race meetings were conducted during calendar year 1984, but which were suspended for 30 days or more during that calendar year because of fire, and a holder of a permit to conduct harness race meetings, who conducted harness race meetings at the aforementioned racetrack during 1984 and who continues to conduct harness race meetings at that racetrack, shall distribute all sums deposited in any pool where the patron is required to select one horse to the winners thereof, less an amount which shall not exceed 17% of the total deposits plus the breaks. In every pool where the patron is required to select two horses, the holder of the permit shall distribute all sums deposited in each pool to the winners thereof, less an amount which shall not exceed 19% of the total deposits plus the breaks. In every pool where the patron is required to select three or more horses, the holder of the permit shall distribute all sums deposited in each pool to the winners thereof, less an amount which shall not exceed 25% of the total deposits plus the breaks. The permitholder shall distribute to the persons holding winning tickets in any of the aforementioned pools, as a minimum, a sum not exceeding $0.10, calculated on the basis of each dollar deposited in any pool after the deduction of the 17%, 19% or 25%, as the case may be. Should the amount remaining in the pool be insufficient to pay the winners the minimum, the breakage accruing in that race, or any necessary portion thereof, shall be applied toward making up any such deficiency. The breaks are hereby defined as the odd cents over any multiple of $0.10, calculated on the basis of $1.00 otherwise payable to a patron. The permitholder shall retain for his own uses and purposes 50% of the breaks as herein defined, except as the same shall have been applied toward making up a deficiency in a pool as herein provided, and shall distribute as purse money the remaining 50%. The permitholder shall submit to the commission every seventh day of any and every race meeting a report under oath showing the daily and total amount of the breaks, together with such other information as the commission may require. All sums held by the permitholder for payment of outstanding parimutuel tickets, not claimed by the persons entitled thereto within six months from the time such tickets are issued, shall be paid upon the expiration of such six-month holding period as follows: a. beginning July 1, 1997 50% shall be paid to the racing commission for deposit in the general fund of the State and disposition in accordance with section 4 of P.L. ,

c. (C. ) (now pending before the Legislature as this bill); b. 25% shall be retained by the permitholder to supplement purses for sire stakes races on which there is parimutuel wagering; and c. 25% shall be retained by the permitholder to supplement overnight purses.

    Where it is shown to the satisfaction of the commission that the reason for the parimutuel tickets being outstanding and unclaimed is the loss, misplacement or theft of the tickets within the confines and control of the parimutuel department of the permitholder, and it is further shown to the satisfaction of the commission that the parimutuel tickets have been cashed by the parimutuel department, the commission may adjust and credit the permitholder's account accordingly and the permitholder shall reimburse any employee who has been held personally accountable and paid for such lost, stolen or misplaced tickets.

    All outstanding parimutuel ticket money shall be deposited in an account separate and apart from the track's mutuel or general treasury account. The outstanding parimutuel ticket account shall be subject to the rules and regulations prescribed by the Division of New Jersey Racing Commission.¹

(cf: P.L.1986, c.19, s.2)

    ¹3. Section 7 of P.L.l971, c.137 (C.5:10-7) is amended to read as follows:

    7. a. The authority is hereby authorized, licensed and empowered to apply to the Racing Commission for a permit or permits to hold and conduct, at any of the projects set forth in paragraphs (1) and (5) of subsection a. of section 6 of P.L.1971, c.137 (C.5:10-6), horse race meetings for stake, purse or reward, and to provide a place or places on the race meeting grounds or enclosure for wagering by patrons on the results of such horse races by the parimutuel system, and to receive charges and collect all revenues, receipts and other sums from the ownership and operation thereof; provided that only the authority through its employees shall conduct such horse race meetings and wagering and the authority is expressly prohibited from placing in the control of any other person, firm or corporation the conduct of such horse race meetings, or wagering.

    b. Except as otherwise provided in this section, such horse race meetings and parimutuel wagering shall be conducted by the authority in the manner and subject to compliance with the standards set forth in P.L.1940, c.17 (C.5:5-22 et seq.) and the rules, regulations and conditions prescribed by the Racing Commission thereunder for the conduct of horse race meetings and for parimutuel betting at such meetings.

    c. Application for said permit or permits shall be on such forms and shall include such accompanying data as the Racing Commission shall prescribe for other applicants. The Racing Commission shall proceed to review and act on any such application within 30 days after its filing and the Racing Commission is authorized in its sole discretion to determine whether a permit shall be granted to the authority. If, after such review, the Racing Commission acts favorably on such application, a permit shall be granted to the authority without any further approval and shall remain in force and effect so long as any bonds or notes of the authority remain outstanding, the provisions of any other law to the contrary notwithstanding. In granting a permit to the authority to conduct a horse race meeting, the Racing Commission shall not be subject to any limitation as to the number of tracks authorized for the conduct of horse race meetings pursuant to any provision of P.L.1940, c.17 (C.5:5-22 et seq.). Said permit shall set forth the dates to be allotted to the authority for its initial horse race meetings. Thereafter application for dates for horse race meetings by the authority and the allotment thereof by the Racing Commission, including the renewal of the same dates theretofore allotted, shall be governed by the applicable provisions of P.L.1940, c.17 (C.5:5-22 et seq.). Notwithstanding the provisions of any other law to the contrary, the Racing Commission shall allot annually to the authority (1) for the Meadowlands Complex, in the case of harness racing, not less than 100 racing days, and in the case of running racing, not less than 56 racing days, if and to the extent that application is made therefor, and (2) for any other project which is set forth in paragraph (5) of subsection a. of section 6 of P.L.1971, c.137 (C.5:10-6), and which was previously operated by a permitholder other than the authority, racing days shall be limited, in type of racing and amount of days, to those allotted by the Racing Commission to the prior permitholder for the year 1985, as of December 13, 1984; except that the authority may apply to the Racing Commission for an extension of the number and type of racing days pursuant to section 2 of P.L.1984, c.247 (C.5:5-43.1).

    d. No hearing, referendum or other election or proceeding, and no payment, surety or cash bond or other deposit, shall be required for the authority to hold or conduct the horse race meetings with parimutuel wagering herein authorized.

    e. The authority shall determine the amount of the admission fee for the races and all matters relating to the collection thereof.

    f. Distribution of sums deposited in parimutuel pools to winners thereof shall be in accordance with the provisions of section 44 of P.L.1940, c.17 (C.5:5-64) pertaining thereto. The authority shall make disposition of the deposits remaining undistributed as follows:     (1) In the case of harness races:

    (a) Hold and set aside in an account designated as a special trust account 1% of such total contributions in all pools, to be used and distributed as hereinafter provided and as provided in section 5 of P.L.1967, c.40, for the following purposes and no other:

    (i) 42 1/2% thereof to increase purses and grant awards for starting horses, as provided or as may be provided by rules of the New Jersey Racing Commission, with payment to be made in the same manner as payment of other purses and awards;

    (ii) 49% thereof for the establishment of a Sire Stakes Program for standardbred horses, with payment to be made to the Department of Agriculture for administration as hereinbefore provided;

    (iii) 5 1/2% thereof for contributions and awards designed to improve and promote the standardbred breeding industry in New Jersey through payment of awards to owners and breeders of New Jersey bred horses, which are registered with the Standardbred Breeders' and Owners' Association of New Jersey and which earn portions of purses in open events on New Jersey tracks, and to owners of stallions posted on the official stallion roster of the Standardbred Breeders' and Owners' Association of New Jersey, which sire such registered New Jersey bred money earners;

    (iv) 3% thereof for other New Jersey horse breeding and promotion conducted by the New Jersey Department of Agriculture.     Payment of the sums held and set aside pursuant to subparagraphs (iii) and (iv) shall be made to the commission every seventh day of any and every race meeting in the amount then due, as determined in the manner provided above, and shall be accompanied by a report under oath showing the total of all such contributions, together with such other information as the commission may require.

    (b) Distribute as purse money and for programs designed to aid the horsemen and the Standardbred Breeders' and Owners' Association of New Jersey 5.1175%, or in the case of races on a charity racing day 5%, of such total contributions. Expenditures for programs designed to aid the horsemen and the Standardbred Breeders' and Owners' Association of New Jersey shall not exceed 3.5% of the sum available for distribution as purse money. The formula for distribution of the purse money as either overnight purses or special stakes shall be determined by an agreement between the Standardbred Breeders' and Owners' Association of New Jersey and the authority. Notwithstanding the foregoing, for pools where the patron is required to select two or more horses, the authority shall distribute as purse money 5.6175%, or in the case of races on a charity racing day 5.5%, of the total contributions and for pools where the patron is required to select three or more horses, the authority shall distribute as purse money 7.1175%, or in the case of races on a charity racing day 7%, of the total contributions. Notwithstanding the foregoing, for pools where a patron is required to select three or more horses, the authority shall retain out of the 7.1175% or 7% to be distributed as purse money a sum deemed necessary by the racing commission, for use by the commission to finance a prerace blood testing program, and such other testing programs which the commission shall deem proper and necessary and which shall be subject to the regulation and control of said commission.

    (c) In the case of races on a racing day other than a charity racing day, distribute to the Standardbred Breeders' and Owners' Association of New Jersey for the administration of a health benefits program for horsemen .1175% of such total contributions.

    (d) In the case of races on a racing day other than a charity racing day, distribute to the Sire Stakes Program for standardbred horses .02% of such total contributions.

    (e) In the case of races on a racing day other than a charity racing day, distribute to the Backstretch Benevolency Programs Fund created pursuant to P.L.1993, c.15 (C.5:5-44.8) .01% of such total contributions.

    (2) In the case of running races:

    (a) Hold and set aside in an account designated as a special trust account 5% of 1% of such total contributions, to be used and distributed for State horse breeding and development programs, research, fairs, horse shows, youth activities, promotion and administration, as provided in section 5 of P.L.1967, c.40 (C.5:5-88).     (b) Distribute as purse money and for programs designed to aid the horsemen and the New Jersey Thoroughbred Horseman's Benevolent Association 4.475%, or in the case of races on a charity racing day 4.24%, of such total contributions. Expenditures for programs designed to aid the horsemen and the New Jersey Thoroughbred Horseman's Benevolent Association shall not exceed 2.9% of the sum available for distribution as purse money. The formula for distribution of the purse money as either overnight purses or special stakes shall be determined by an agreement between the New Jersey Thoroughbred Horseman's Benevolent Association and the authority. Notwithstanding the foregoing, for pools where the patron is required to select three or more horses, the authority shall distribute as purse money 7.475%, or in the case of races on a charity racing day 7.24%, of the total contributions.

    (c) 10% of 1% of all pools shall be deducted and set aside in the special trust account established pursuant to section 46b.(1)(e) and 46b.(2)(e) of P.L.1940, c.17 (C.5:5-66).

    (d) In the case of races on a racing day other than a charity racing day, distribute to the Thoroughbred Breeders' Association of New Jersey .02% of such total contributions.

    (e) In the case of races on a racing day other than a charity racing day, distribute to the Backstretch Benevolency Programs Fund created pursuant to P.L.1993, c.15 (C.5:5-44.8) .01% of such total contributions.

    For pools where a patron is required to select three or more horses, 50% of 1% of the total contributions shall be held and set aside in that special trust account.

    Payment of the sums held and set aside pursuant to subparagraphs (a) and (c) of this subsection shall be made to the commission every seventh day of any and every race meeting in the amount then due, as determined in the manner provided above, and shall be accompanied by a report under oath showing the total of all such contributions, together with such other information as the commission may require.     In addition to the amounts above, in the case of races on a racing day designated or allotted as a charity racing day pursuant to P.L.1977, c.200 (C.5:5-44.2 et seq.), P.L.1992, c.113 (C.5:5-44.7), or P.L.1993, c.15 (C.5:5-44.8), an amount equal to 1/2 of 1% of all parimutuel pools shall be paid to the commission at the time and in the manner prescribed by the commission.

    All amounts remaining in parimutuel pools, including the breaks, after such distribution and payments shall constitute revenues of the authority. Except as otherwise expressly provided in this section 7, the authority shall not be required to make any payments to the Racing Commission or others in connection with contributions to parimutuel pools.

    In the event that a written agreement between the authority and the respective horsemen's associations shall require the distribution of additional sums of money to increase purses or contributions to the special trust accounts hereinabove provided, or both, any such distribution to be made in the year 1981 shall be made by the authority only from, and to the extent of, available moneys from the preceding year set aside for such purpose, after application of the authority's revenues, moneys or other funds as provided in subsection c.(1), (2), (3), (4), (5), (6) and (7) of section 6 of P.L.1971, c.137 (C.5:10-6).

    g. All sums held by the authority for payment of outstanding parimutuel tickets not claimed by the person or persons entitled thereto within the time provided by law shall be paid upon the expiration of such time, without further obligation to such ticketholder, as follows:

    (1) In the case of running and harness races, beginning July 1, 1997 50% of those sums shall be paid to the Racing Commission for deposit in the general fund of the State and disposition in accordance with section 4 of P.L. , c. (C. ) (now pending before the Legislature as this bill);

    (2) In the case of running races, 50% of those sums shall be paid to the commission and set aside in the special trust account established pursuant to section 46b.(1)(e) and section 46b.(2)(e) of P.L.1940, c.17 (C.5:5-66); and

    (3) In the case of harness races, 25% of those sums shall be retained by the permitholder to supplement purses for sire stakes races on which there is parimutuel wagering, and 25% shall be retained by the permitholder to supplement overnight purses.

    h. No admission or amusement tax, excise tax, license or horse racing fee of any kind shall be assessed or collected from the authority by the State of New Jersey, or by any county or municipality, or by any other body having power to assess or collect license fees or taxes.     i. Any horse race meeting and the parimutuel system of wagering upon the results of horse races held at such race meeting shall not under any circumstances, if conducted as provided in the act and in conformity thereto, be held or construed to be unlawful, other statutes of the State to the contrary notwithstanding.

    j. Each employee of the authority engaged in the conducting of horse race meetings shall obtain the appropriate license from the Racing Commission, subject to the same terms and conditions as is required of similar employees of other permitholders. The Racing Commission may suspend any member of the authority upon approval of the Governor and the license of any employee of the authority in connection with the conducting of horse race meetings, pending a hearing by the Racing Commission, for any violation of the New Jersey laws regulating horse racing or any rule or regulation of the commission. Such hearing shall be held and conducted in the manner provided in said laws.¹

(cf: P.L.1993, c.353, s.6)

    ¹4. (New section) Beginning July 1,1997, amounts resulting from parimutuel tickets remaining unclaimed after six months which are paid to the Racing Commission for deposit in the general fund pursuant to subsection a. of section 44 of P.L.1940, c.17 (C.5:5-64), subsection a. of section 1 of P.L.1984, c.236 (C.5:5-64.1) and paragraph (1) of subsection g. of section 7 of P.L.1971, c.137 (C.5:10-7) shall be appropriated each fiscal year as follows: the first $300,000 to Rutgers, the State University to fund the university's equine research programs and the balance to the Racing Commission to be used for the expenses of the commission.¹

     ¹5. (New section) Notwithstanding the provisions of section 15 of P.L.1992, c.19 (C.5:12-205) or any other law to the contrary, up to one-half of the total amount of funds available from calendar year 1996 under subsection d. of that section may be used during fiscal year 1996-97 by the New Jersey Racing Commission for the expenses of the commission. Funds from that allocation which are not used by the commission shall be used for the purposes of, and in the order of priority established by, subsection d.¹

    ¹[2.] 6.¹ This act shall take effect immediately ¹, and section 5 shall expire on June 30, 1997¹.

Provides funding to New Jersey Racing Commission from Casino Simulcasting Special Fund during fiscal year 1996-97 and thereafter from unclaimed parimutuel tickets.